All eyes on new SAA interim CEO to secure funding to pay debt

JOHANNESBURG – The South African Airways (SAA) confirmed that it would need another R4 billion to survive the current financial year.This came as outgoing CEO Vuyani Jarana announced his departure, after citing not receiving enough government support.The airline indicated that it needs more money to pay its existing debt to survive.Zukisa Ramasia will take over as interim CEO as of Monday and reports say she will need to secure funding fast.Jarana unexpectedly resigned, saying his turnaround strategy was being undermined by a lack of state funding and too much bureaucracy.Board member Martin Kingston responded by saying the new cash injection the airline seeks would enable it to finalise outstanding financial statements.The cash injection would also help the airline to continue operating until the 2021/22 financial year when it expects to make a profit.However, there was no indication as to whether government would agree to another cash injection.In the meantime, interim chief financial officer Deon Fredericks said the airline also approached three additional lenders, which include international funders for short-term help.GOVT FULLY AWARE OF OUR NEEDKingston said the government was fully aware of the need to put in place, not only short-term financing but in addition to that, to ensure there was a sustainable balance sheet to be able to support and underpin the turnaround strategy.He said the airline was in advanced talks with lenders about repaying the R3.5 billion bridge loan due next month and extending the R9.2 billion long-term loan over a protracted period of time.However, this would be on the condition of the government's ongoing financial support.
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